Politicians of all parties seem intent on pushing through the tenant fee ban despite the hugely negative impact it will have on many letting agents’ businesses. From the moment the move was announced, the sector’s professional bodies swung into action, lobbying loudly on their members’ behalf.
Alan Stewart, Director and Head of Residential Lettings and Property Management at Caxtons, says, “Professional bodies are an effective way — and often the only way — member agencies can lobby government. They promote the interests of their members but rely on members’ interaction to give weight to, and provide an unbiased argument.
“When legislation or regulation is proposed or imposed the professional bodies are more often than not approached to comment as the collective voice of the property sector.”
Unfortunately, says Tim Douglas, who is policy and campaigns officer at NFoPP, which incorporates Propertymark- ARLA and Propertymark-NAEA, thus far their efforts have not been successful in changing the Government’s mind about the letting fee ban itself, although there have been some concessions in the draft bill, for example, the proposal to cap maximum deposits at four weeks rent has been changed to six weeks.
In other areas, however, Douglas says lobbying efforts have been far more successful, for example, in pushing for mandatory client money protection, as well as convincing the Government to cut the waiting time for Universal Credit payments.
On the Propertymark-NAEA front, he describes a recent success. “On the sales side we’ve got the new Land Transaction Tax coming in in Wales in April and the NAEA Chief Executive, Mark Hayward, gave evidence to the Welsh National Assembly Finance Committee. We said there should have been a higher rate before stamp duty kicks in and they seem to have listened, with it kicking in at £180,000 before anyone pays any stamp duty.”
But as Chris Norris, Head of Policy, Public Affairs and Research at the National Landlords Association, points out, lobbying isn’t always going to produce the desired outcomes. “I’d love to say we win all of the time but a lot of the time we don’t. Sometimes it is just about demonstrating to our members that we are trying to get the best for them and the chances of winning aren’t always great but we can show them what we are doing and what the direct impact of changes on them will be.”
THE RICS APPROACH
The RICS takes a different approach, “As the leading professional body across the land, property and construction sectors, we are bound under the terms of our Royal Charter to always act in the interests of the public as a whole,” says Lewis Johnston, Parliamentary Affairs Manager. “To this end, we are in constant contact with decision makers across the board – including in government – and we are strong advocates for the policy positions we develop. The crucial thing is that we are not a trade body – we don’t exist to advance any sectional interest and as such it is not for us to ‘fight anyone’s corner’ in the sense of lobbying for the benefit of practitioners. Rather, we work closely with Government to encourage better regulation – whether that’s through our engagement with the PRS regulatory agenda or our response to the recent consultation on improving the home buying and selling process. At every point, we act to improve standards in the public interest, and ultimately we believe this is in the long-term interests of the sector as well: upholding the highest values of professionalism.
One of Government’s most common requests is that we ‘speak with one voice’ and as far as possible that is what we aspire to. We are certainly different to other trade bodies but we share many of the same goals and aspirations. Lewis Johnston, RICS.
“We have strong partnerships with organisations right across the professions, and on issues from housing policy to Brexit, we regularly collaborate and formulate common positions with those partners. As well as positioning ourselves with a strong voice in our own right, we fully recognise the benefits of cooperation and common endeavour – one of Government’s most common requests of the sector is that we ‘speak with one voice’ and as far as possible that is what we aspire to. Under our Royal Charter we are certainly different to many of the other trade bodies operating in the built environment, but we share many of the same goals and aspirations.”
On the landlord front, Chris Norris says that the big issue for the NLA’s campaigning efforts over the past couple of years has been Section 24 – the changes to the way landlords are able to claim mortgage interest relief – but he says, as with the tenant fee ban, trying to influence change on a central government issue is never straightforward or fast.
RICS allows us to draw from true data drawn from national statistics. With so many conflicting reports, it’s invaluable for us. We can discuss it with clients and advise accordingly. Tina Templeman, Mishon Mackay.
“It is easier to show members what we are doing and to reach the end of a campaign at a local level. If you look at something like trying to implement a tax change in Westminster, it is almost certain that is going to be a two or three year campaign until you start to see whether you are going to be effective or not. When it is something local, campaigning to change a local licensing scheme, for example, that will probably run its course in 9-12 months,” he says. There’s also a place for the more locally focused professional groups, says Tina Templeman, Branch Director at Mishon Mackay’s Rottingdean office, and also President of the Brighton & Hove Estate Agents Association for 2018. “We will continue to provide free training for members, an advisory forum and a voice to local councils about proposals such as board restrictions and HMO licensing rules. We were recently instrumental in the implementation of a college course for school leavers at GB MET College Brighton, a two-year course aimed at teaching the basics of estate agency and customer services.”
TOO MANY COOKS?
Not everyone is convinced we need quite so many professional bodies, however, and the difficulty the newest entrant, CIELA, the Charter for Independent Estate and Lettings Agents, has had in getting off the ground would seem to support the idea that there is a limit.
Trevor Abrahmsohn, Managing Director of Glentree International, says, “Seriously, I’m not sure if any of these august bodies (ARLA, RICS, UKALA, NALS) do anything to protect the consumer and I’m not sure they even protect agents from each other, since the antics and unethical practices between them are breathtaking and at odds with the moral code to which they are meant to conform.” He concedes, however, that “they do play their role in trying to prevent the Housing Ministry lurching from the sublime to the ridiculous”.
Abrahmsohn says he would like to see the bodies take more action to ease the regulatory burden on agents.
“The residential lettings industry has more regulation now than you can ‘shake a stick at’. Business, which is the only thing that pays for the overheads, is an afterthought today, once you have finished complying with the Estates Agents Act, money laundering, health and safety, data protection, right-to-rent, fire regulations, etc. I wish that the professional associations would work harder to lessen the tourniquet on the business.”
On this point Tim Douglas says there is a need for more ‘joined-up’ thinking from the Government. “There are over 145 pieces of legislation and 300 regulations when you come to rent out a property so we certainly agree that legislation in this area has been changed too frequently and we are continually looking for a joined-up approach from the government. Different political parties have tinkered with things in too many ways.”
ROGUES AND REGULATIONS
Isobel Thomson, CEO of the National Approved Letting Scheme (NALS) agrees, and thinks regulation could go some way towards solving the problem. “We continue to highlight to government what is needed for the good of the PRS – which is essentially a strategic vision and not just more piecemeal legislation.
“We were delighted at the Government’s announcement that it intends to regulate all lettings and management agents, as we believe it is the only way to ensure that all agents work to the same consistent standards and offer consumers the protection they deserve.”
Regulation would also go some way to improving the sector’s image, she adds,
“To be clear, we know that the majority of letting agents operate to professional standards, adhering to the many rules and regulations governing the sector, providing a much-needed service to landlords and tenants alike, and charging reasonably for it.
“Unfortunately, as in any area of life, the bad apples will tarnish the barrel and of course there are cases of criminal agents. Given that the sector is estimated to hold around £3bn of tenant and landlords’ money at any time, protecting the consumer is vital. If we want to improve the reputation of the sector, then regulating to stamp out rogues and criminals is key.”
Regulation would also presumably level the playing field, as a common gripe of agents which belong to one or more professional associations is that they are at a disadvantage to those which don’t.
Caxtons’ Stewart says, “Unless it becomes mandatory regulation for all letting agents to be members of ARLA or NALS or similar, those that are already accredited members of professional bodies are potentially at a financial disadvantage covering compliance costs, staff training and following strict codes of conduct. In addition, the door will remain wide open for non-members to abuse any guidelines, rules or regulations that firms such as ours follow to the letter.
“Our Gillingham office recently had its photographs and the description of a property that it had let ‘used’ by a non- ARLA member — the only difference being that they tagged the property on their website as ‘recently let’ – but they had never represented the landlord or the property. In this instance there is very little that ARLA, or we can do – other than the action we took to send a solicitor’s letter, but this has resulted in additional costs for us.”
Of course, membership of professional associations provides more than just lobbying and enforcement, with training, legislative updates and networking all prime benefits cited by members. It can also be a selling point with potential customers, says Tim Hassell, Managing Director at Draker Lettings. “Draker Lettings is registered with both ARLA and The Property Ombudsman. This not only gives us professional bodies to contact if we are ever unsure about how to deal with a situation, but it also provides our clients and tenants with a very clear assurance that should they not be happy with the services we provide, or decisions that we make, they have someone to turn to.”
On the sales front, it also gives agents an edge, says Mishon Mackay’s Templeman. “RICS allows us to draw from true data that has been obtained from national statistics and with so many conflicting reports, it’s an invaluable tool for us. We can discuss the data with clients and assess and advise on market conditions accordingly, as well as structure our business plans to incorporate market challenges and trends.”
Even if the professional bodies of the property industry do not ultimately succeed in bringing about a change in the proposed letting fee ban – which given the consensus among political parties on the issue means it is unlikely – it seems there are plenty of other areas where they are successfully influencing housing policy and proving their worth to members.